ISD incoming termination rate cut to 30 paise from 53 paise
The Telecom Regulatory Authority of India, on Friday, cut the international incoming call termination rate to 30 paise per minute from 53 paise, with effect from February 1, aiming to curb the “grey route”. However, the Cellular Operators Association of India (COAI), opposing the decision, said that this could lead to an annual payment loss of Rs 2,000 crore for Indian operators from foreign carriers for incoming international calls.
“The Authority is of the view that, while deciding on the appropriate level of ITC (international termination charge) in the country, curbing the menace of grey route should be a more important regulatory priority than facilitating the shift of the international incoming traffic from OTT (over-the-top) route to carrier route,” Trai said.
The international termination charge is levied by telecom companies here from overseas operators on the networks of which a call may have been made. The sector regulator pointed out that the grey market, which routes the ISD calls made in India by setting up illegal voice-over internet protocol gateways, something that needed to be curbed.
“In view of the significant arbitrage opportunity between ITC and domestic rates, high level of ITC will also give rise to growth of the grey market at the cost of national security and revenues of Indian operators. At present, about 20 per cent international incoming calls terminate in India via grey routes. Therefore, lowering of ITC to the cost level will facilitate shift of international incoming traffic from OTT services to ILD (international long distance) carrier and curb the menace of grey market, which will be in the interest of all stakeholders including security agencies,” Trai said, explaining its decision.
Trai also said that the grey route process posed serious security concerns, apart from causing significant leakage in the revenue that would otherwise be accrued with the country and the operators here.
However, the COAI argued that the move of reducing the rate by nearly 43 per cent could result in loss of foreign exchange, as well as a loss of revenue to the exchequer from licence fee and GST.
“The Indian telecom industry is passing through one of its toughest phases with severe financial stress … The regulation from Trai to slash ILD termination rates from 53p/ min to 30p/ min is a body blow to an already stressed industry. The reduction does not benefit any customers and will only benefit foreign carriers … We therefore strongly urge the government and the Trai to re-examine the regulation, and rescind it in the interest of the nation and the telecom industry,” COAI director general Rajan S Mathews said, adding that one of the association’s members Reliance Jio, had divergent views on the issue.